Generative AI is rapidly transforming software and other white-collar services. But an even larger disruption may be building in the physical economy — where automation is poised to reshape transport networks, logistics hubs and manufacturing plants.
In an exclusive interview with Benzinga, Oxford Economics senior economist Nico Palesch said that up to 20% of the U.S. workforce could be highly exposed to physical robotics and automation over the next decade or two.
Manufacturing, Transport See 50%+ Roles Exposed To Automation
Transport and logistics tops the list, with more than half of all jobs in the sector at risk from self-driving and warehouse automation technologies.
Manufacturing has 51.1% of jobs vulnerable to partial or complete replacement by robotics. Accommodation and catering stand at 47.2%, retail at 40.2%, wholesale at 31.0% and extraction at 35.1%.
Palesch estimates that, economy-wide, about 20% of the workforce could be affected by robotics within the next decade or two.
“The people losing their jobs aren’t necessarily going to get new jobs,” he told Benzinga.
A Risk Of Structural Unemployment?
Asked if today’s AI wave reflects Schumpeter’s creative destruction or signals deeper structural harm for the labor market, Palesch struck a cautious tone.
In the near term, workers displaced from sectors like trucking may struggle for years, especially older workers with specialized skills.
A 50-year-old truck driver whose livelihood is eliminated by autonomous vehicle software is unlikely to find equally skilled, equally paid work elsewhere.
Individual communities can feel the political and economic fallout for a very long time, even when aggregate economic statistics look healthy.
“For them unemployment will be quite a bit higher probably for many many years, potentially for the rest of their lives” he said.
Over time, however, cost savings and productivity gains tend to spur new investment and job creation elsewhere in the economy.
“We’re still haven’t seen any evidence that like we’re going to need to see massive amounts of less human labor over the coming decades,” Palesch said, arguing historical technological revolutions eventually generate new sectors and roles.
Yet, “there can certainly be a structurally higher unemployment rate for the broader economy” he added.
The Inequality Question — And The Limits of UBI
Perhaps the most politically charged dimension of the automation wave is what it does to the distribution of wealth.
If capital increasingly replaces labor, the returns flow to those who own the capital — widening an already yawning gap between the asset-rich and the wage-dependent.
Yet he resists treating this outcome as inevitable.
AI, he said, could also democratize opportunity — “empower normal people to do their own businesses, to have their own ideas” and operate independently of large corporations in ways previously out of reach.
The idea of a universal basic income, in his view, would only be fiscally feasible in an “extreme scenario” where AI drives a massive step-change in growth and significantly expands the tax base, while also sharply increasing inequality.
Absent a massive productivity windfall, current government debt levels leave little room for such sweeping programs.
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